Amazon is building on its smart speaker lead after the Echo's sales during the holidays

With the holiday shopping season coming to a close, Amazon's Echo devices continued to top sales charts, with the Echo Dot finishing the season as the top selling product overall on Amazon, the company announced.

The e-commerce giant is already the leading player in the smart speaker market, and has used the holiday shopping season in consecutive years now to build on its head start in the space, and high device sales and consumer adoption of Amazon's smart speakers should further that lead.

Amazon continues to cement its position as the market leader in the smart speaker space by leveraging its e-commerce platform. In both 2016 and 2017, Amazon used discounts and prime placement on its site to increase consumer awareness of the devices, and these choices led to high sales both during the Black Friday shopping period as well as through the remainder of the shopping season.

The company has now sold out of Echo Dot speakers completely for two years running, while this year supplies of the Echo Spot and Echo Button were also exhausted. Competitors, meanwhile, don't have the same direct access to online holiday shoppers. While Google and Apple have e-commerce portals of their own and have partnered with others — Google and Walmart are pushing the Google Home line together, for instance — they lack the online shopping presence of Amazon, which posted record holiday sales this year. And with the HomePod's release delayed to next year, Apple missed out on this year's holiday sales altogether.

The market for smart speakers continues to grow, fueled in part by the holiday but also by the growing utility of the devices. Consumers who did receive the devices seemed to be making use of them; the Alexa app shot to the top of the iOS App Store and Android's Google Play Store as consumers who'd received speakers for the first time set them up. And Amazon reported that consumers were using Alexa more throughout the season as well, with music-listening time tripling and requests for cooking advice increasing more than nine times.

Additionally, while many smart speakers are purchased as gifts, 61% of existing device owners said they planned to buy an additional smart speaker during the holiday shopping season, according to a survey from Jacobs Media Strategies. This early lead in device sales and usage will give Amazon valuable insights into how consumers interact with their smart speakers and voice-powered assistants, allowing it to keep rapidly iterating new Echo products that expand their appeal. Amazon will likely continue to lead the way in the growing smart speaker market, with BI Intelligence forecasting that it will sell more than 70 million smart speakers through 2022, building on the position it's used the holiday shopping seasons to establish.

BI Intelligence, Business Insider's premium research service, has put together a Smart Speaker report that analyzes the market potential of the Echo Look, Echo Show, and HomePod. Using exclusive survey data, this report evaluates each device's potential for adoption based on four criteria: awareness, excitement, usefulness, and purchase intent. Finally, the report draws some inferences from our data about the direction the smart speaker market could take from here.

Here are some of the key takeaways:

Amazon's new Echo Show is the big winner — it has mass-market appeal and looks like it will take off. The combination of usefulness and excitement will drive consumers to buy the Echo Show. The Echo Look, though, seems like it will struggle to attract that same level of interest.

Apple's HomePod looks likely to find a place in the smart speaker market but won't dominate its space like the iPhone or iPad did.

The smart speaker market will evolve rapidly in the next few years, with more devices featuring screens, a variety of more focused products emerging, and eventually, the voice assistant moving beyond the smart speaker.

Highlights the aims and strategies of major players in the smart speaker market.

Provides analysis on the direction this nascent market will take and the opportunity for companies considering a move into the space.

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